The CBI says that sudden stops and cliff edges don’t help businesses and that a rapid opening up of the economy is unlikely.
The Confederation of British Industry believes that an extension to the furlough scheme and business rates holiday is necessary, and should be made before the Budget on 3rd March. Furlough is currently set to finish at the end of April and the the one-year rates holiday for the retail, leisure and hospitality sectors is due to finish at the end of March
In its Budget submission to chancellor Rishi Sunak, the CBI said businesses – including retailers – cannot be expected to wait nearly two months to know whether support will be extended beyond the current deadlines. Noting the end dates of the two initiatives, the CBI pointed out that many businesses will already be trying to plan spending for the year ahead.
CBI director-general Tony Danker said: “Our Covid-related business support asks are about moving now or soon, rather than waiting until March. Business support needs to go in parallel with the tiering of restrictions. Sudden stops and cliff edges really don’t help and I don’t think anybody in government believes that we’re going to have a sudden opening up with the economy.”
The CBI said business rates would become a serious problem if not addressed ahead of the Budget and the imminent end of the schemes. The organisation suggests that they should be extended by at least three months and the government should also commit to a significant overhaul of commercial property tax, which remains the highest in the G7.
The CBI stressed that the government must reassure businesses that they will continue to be supported prior to the Budget, urging the chancellor to act now in order help businesses with forward planning.
CBI chief economist Rain Newton-Smith said: “We need to target that support at the sectors that are particularly challenged, where resilience is particularly low. Furthermore, we need the chancellor to act on some of the longer term things that will really get business investment going and put this recovery on a much more sustainable footing both now and into the long term.”